Tuesday, October 27, 2015

I had a great interview yesterday on the Max Keiser
programme, during which we discussed the dichotomy that is George Osborne! Max
teased me for my recent blog in which I accused George of unwittingly facilitating
financial crime in the City! Of this, more later!

George Osborne has now been defeated in the House of
Lords over his deceitful attempts to deny working tax credits to ordinary men
and women who are working for a living, but at a low standard of income.

I say his plans are deceitful because a) they were not part
of the Tory Election Manifesto in the first place, Osborne refused to say where
he would make cuts in public expenditure, and Cameron had said publicly that he
would not cut tax credits (although it is now not clear whether he meant child
tax credits or working tax credits)! Secondly, the Tories tried to cheat by
putting the deal through in the form of a Statutory Instrument (which the
second chamber can vote against) as opposed to a finance bill, which by tradition,
the second chamber would not vote down.

Perhaps what is more important is the fact that this
blatant attempt to hoodwink the House of Lords, backfired on the Tory toffs,
and they have been made to pay for it. It is all typical of the way in which
they think to run politics in the UK, it’s all part of a silly public schoolboys’
game, in which the clever side which can dissemble better, wins the prizes. It
is all predicated along the lines of the debates in the Oxford Union, during
which witty and clever tricks are pulled on the opposition. Under other
circumstances, it would all be so terribly funny, except that it has terrible
implications for the lives of hundreds of thousands of working people who rely
on working tax credits to keep their heads above water.

Of course, the Tories are whingeing and bleating,
accusing the House of Lords of unconstitutional actions and threatening all
kinds of dire retribution, including the possibility of flooding the second
chamber with up to 150 new peers to give the Tories a majority there.

It isn’t going to happen of course. Just the thought of
the toffs party creating 150 new peers to railroad through unpopular Tory policies
designed to grind the faces of the poor, is so risible, that even this present
bunch of spivs, second-rate accountants and Little Englanders will think twice
before doing such a stupid action.

But the point to remember is that this piece of political
chicanery was designed to take away £4.4 billion in working tax credits from
people who need it most, people who are working and who may have young children
and who, without the benefit of this payment, will find it incredibly hard to
manage.

Working tax credits are in fact a subsidy on employers
who have been encouraged to pay very low wages. The money which the tax payer
is paying out is subsidising the employers who are paying wages, some of which
are below the statutory minimum.

I don’t have anything against a man or woman who starts
up a business, with the aim of creating a product, or providing a service, and
who, in so doing, provides work for ordinary people. As long as the employer
pays a fair wage on which his workers can live with dignity, and pays the
correct level of taxes he is required so to do, then I don’t care if the
employer becomes very rich indeed.

But if he is paying wages which are so low that the
employee needs to seek a state handout in order to survive, then I want to know
why I am subsidising that employer’s profits. I don’t want to live in a welfare-benefit
society, I want to live in a society where men and women are paid fairly and
sufficiently so they don’t need recourse to welfare, but it is not realistic to
take tax credits from people now in return for the promise to the future of
better pay in 5 years time! That doesn’t cut any mustard at all!

These points were all raised and aired yesterday in my
talk with Max Keiser.

The biggest point I wanted to make was that in their
attempts to curb the benefit culture, the Tories are attacking the one group of
society, who can afford it least, while at the same time, they are rewarding a
small group in society, the bankers and the financiers with a very great deal
of money, men and women who are busily getting very rich indeed on the proceeds
of the foreign criminal money which is flooding into London.

So, on the one hand, Osborne is seeking to take away
money from people who have been depending on its legitimate receipt in order to
make ends meet, while at the same time, turning a blind eye to the wholesale
breaking of the criminal law, in the way in which the crooked bankers handle
and facilitate vast amounts of foreign money which is finding its way into
London.

So there is one rule for the absurdly rich, dishonest and
powerful in society, and another for the poor and marginalised.

Now, at this point, I expect to start receiving messages
from the unreconstructed spivs who sometimes read my blogs to see how much they
can disagree with me.

‘If we don’t
accept this money, it will merely go elsewhere’ is quite a common observation.

‘It has always been like this, why are you making such a
fuss’ is another.

My point is that we have laws in this country which have
been introduced to prevent the proceeds of crime from being easily assimilated
into the financial system.

Those laws and regulations require banks to undertake significant
checks and due diligence procedures to ensure that they know the provenance of
the funds, and so they can demonstrate a good knowledge of their customer, his
or her business practices, and sources of finance and wealth, in order to be
able to satisfy themselves and the regulators, that the funds they are handling
do not come from illicit or illegal; sources.

Put it like this, if a man were to walk into a bank with
a bag marked ‘swag’, we might think it odd if the bank teller did not make some
enquiries as to the provenance of the money being offered to his institution,
before accepting it!

The fact that the money is paid into the bank from an
account held in some offshore jurisdiction, or from a solicitor’s client trust
account, does not release the banker from his obligations to make the necessary
enquiries to establish the lawful provenance of the money.

That illicit money may only be passing through the financial
system via the bank account in London, but you may rest assured that the bank
will be taking a fee for such a facilitation, and the larger or smellier the sum
of money being transmitted, the bigger will be the fee.

But George is making it easier and easier for his friends
in the banking sector to accept this money, and that is why I accuse him of
unwitting complicity in the facilitation of international organised crime.

You do not help to prevent crime by de-regulating the
financial sector within which much of the criminal facilitation is taking
place. If you are serious about trying to prevent crime, you first make sure
that the regulations are being applied and properly performed, and we know from
repeated reports from the FCA and the NCA that this is not happening, yet
George just goes blithely on ignoring them!

You should make sure that the banks are taking the necessary
steps to identify potential Politically Exposed Persons, before their money is
paid into your bank. In a story in The Times, yesterday, it was reported.

“...General
Franco amassed a fortune by siphoning hundreds of millions from the Spanish
state, according to a new book.

The
dictator, who died in 1975 after ruling Spain for 36 years, took money given to
the state, and from state enterprises, at a time when millions were starving in
the aftermath of the civil war from 1936 to 1939...”

None
of this money has been recovered and Franco’s descendants are still living off
the benefits of its criminal origins.

When
I was a serving detective, we used to say that if there were no people willing
to handle the dishonest proceeds of thieves and robbers, it would make life
significantly harder for the thief to benefit from his crimes. That is why the
Courts have traditionally punished handlers more severely.

The
same goes for the banks in their handling of stolen money, if they were less
willing to accept the money offered to them in dubious circumstances, criminals
would find it much harder to profit from their crimes. Yet strangely, nothing
is happening to bring the bankers to book.

Iceland
has so far sentenced 26 bankers and financiers to prison terms for crimes related
to the global financial crisis. Their combined jail time is 74 years. A great
many more prosecutions are expected. In Britain, no banker has yet been tried
or jailed for such crimes. It makes you wonder whether bankers might be some
sort of "protected species"

We
should not be expected to continue to put up with this egregious level of
criminality and wrong-doing from within our banking system, and bankers should
not be able to get away with the winks and the nods they are being given from
the Treasury as to which money they can accept.

Again,
a staggering level of British hypocrisy is involved.

If
the Government wants the banks to be able to accept this loose money with
impunity, then the least they should do is to repeal the laws which aim to deal
with the criminal laundering of dirty money.

Take
these laws off the statute books and advise the banks that it is now open season
for them to accept any money they want to. Of course, this would not go down
well in our relations with Europe or the USA for that matter, and so rather
than face the degree of political opprobrium which would necessarily follow
such a decision, the Government turns a convenient blind eye and lets the banks
carry on with’ business as usual.’

Wednesday, October 21, 2015

The time has come to state an unpalatable fact which I
nevertheless believe to be true.

I believe that George Osborne, our Chancellor of the
Exchequer, has become unwittingly a pawn in the facilitation of banking crime.

I do not know what other explanation fits the facts.

I say ‘unwittingly’ because I do not believe he is doing
this maliciously, he is doing it because he simply doesn’t know any better.

He is bending to every protestation of innocence the
bankers pour into his ear. He is listening, willingly, to the entreaties of the
banking PR milieu, and he is happy to entertain the applications of the British
Banking Association when they assure him that everything in the banking garden
is rosy!

I think part, if not quite a lot of it, has to do with
his class, background and education, and that leads him , I believe, to look
upon bankers and the banking industry, as a group of honourable men and women,
who are working for the benefit of UK plc.

He is, I suspect, I subscriber to the generally-held
belief, common among senior bankers that they are a protected species, and that
they are incapable of doing wrong. If, for whatever reason, a case develops
which ends up with a banker going to prison, then George and his friends in the
financial sector will simply refer to the ‘rotten apple’ theory, as if that
explains everything.

I have been keeping an eye on George for some time!

I have also been monitoring the developments of the de-regulatory
changes which are being inexorably introduced in the banking sector, making
life even easier for the bankers to accept foreign, dirty and criminal money,
without having to ask too many questions.

There is a great deal of very questionable cash flowing
around the world, like a ‘ball of hot money’, looking for a temporary home. I
am using the motif for dirty money first coined by Professor Tom Naylor in his
wonderful book ‘Hot Money and the Politics of Debt’, and never has it been more
accurate.

We are talking about billions and billions of pounds,
dollars, and euros, and it needs protecting, to keep it out of the purview of
international law enforcement. By far the greatest volume of this dirty
criminal cash emanates from Russia and China, closely followed by other Far
Eastern kleptocracies, Middle East bribe-fest centres and emerging market
business centres like India and Pakistan whose successful entrepreneurs don’t
feel the need to pay taxes.

This money which represents the proceeds of wholesale tax
evasion, state corruption, criminal capital flight, drug trafficking,
cyberfraud, people-trafficking and wholesale money laundering, is generically
known as ‘the proceeds of crime’, and it emanates from a variety of dubious
activities and processes.

Much of it is money generated from the exploitation of
the badly-enforced laws of the countries from whence it comes, and much of it
should, by right, be being used to support and benefit the general population
of those countries by paying for health services, education, hospitals, roads,
and other infrastructure services.

This money, sequestered by the illicit activities of
crooked players is being squeezed into the secret underworld of shadow banking,
and represents a vast ball of hot and homeless money which needs to find a
home, and the longer it can be kept out of the banking system, the less value
it has to the criminal who stole it in the first place.

This money provides the fundamental and underlying
motivator for the British banking sector of the City of London, and it
represents a most tempting target for the itchy palms and the sticky fingers of
the denizens of Threadneedle Street and Canary Wharf!

They couldn’t give a monkeys’ about the fact that it is of
criminal origin, and thus denied to them by a raft of international laws and
regulations. These are not the sort of people to let mere rules get in the way
of their achieving their goals.

The Times reported on October 20th that millions
of pounds of dirty money has been laundered through London because the ‘golden
visa’ system is so open to abuse.

Tier 1 Investor Visas which give guaranteed British
residency in return for a £2 million investment are an open sesame for money
laundering.

Since their introduction in 2008, 3,048 such Visas have
been issued, of which over 60% have been given to wealthy individuals from
Russia and China.

In 2014 of the 1,173 visas issued, half went to wealthy
Chinese citizens, just at the same time as Beijing was seeking to trace vast
amounts of money believed to have been stolen through corruption by bent public
officials.

Transparency International, a major NGO dedicated to
identifying and exposing corruption has reported that ‘...at least £3.15
billion has entered Britain as a result of the Visa scheme...’ T.I estimates
that a significant amount of this money represents corrupt proceeds stolen from
China and Russia.

Now, here is the rub!

Before any bank can accept one penny of any proposed
investment, it has to satisfy itself of the legitimacy of the provenance of the
money. This is an obligation placed upon it by law, and the bank has the
primary responsibility to ensure that it has completed all the necessary due
diligence, and is satisfied that the money is not of suspected criminal origin,
before it can accept it legitimately!

It has to carry out detailed ‘Know Your Customer’
investigations, and particularly where the proposed client could be what has
been known as a ‘Politically Exposed Person’ or PEP, it has additional due
diligence enquiries to complete before it accepts the money.

Of course, as you can imagine, such requirements are
strictly adhered to by British banks, who are famous for their adherence to
laws and dedication to undertaking clean and honest business!

In the article in the Times, a representative of the
British Banking Association, the talking shop for the banking industry has
said; ‘...There are certain jurisdictions that pose challenges for banks in
determining sources of funds. We would welcome and improvements to the Tier 1
Visa scheme that enhance transparency and enable banks to fulfil their
financial crime responsibilities...’

Quite what this civil service-inspired piece of
wabble-babble is meant to mean is unclear, but the message is that the banks
would like to be able to have it easier to accept the money.

How much easier it needs to be is not certain as the
banks do not seem to have any trouble in accepting the proceeds of this dirty
money tsunami. The report last week by the National Crime Authority made it
clear that the volume of criminal money laundering being undertaken in the UK
poses a major threat to UK national security.

At present however, there are no live investigations into
the flows of corrupt funds from China being undertaken in the UK, despite the
fact that the Beijing authorities are running an international operation
torecover an estimated £82 billion in
stolen funds. This does not include the further £31 billion of corrupt funds
leached out of Russia!

Well, how does the Home Office try and ensure that dodgy
money doesn’t come into the UK via the Visa system? What fool-proof systems has
it put in place to stop the flow of blood money?

A Home Office spokesman quoted in the Times said:

“...We require an applicant (for the Visa system) to have
a UK bank account – and therefore pass the bank’s diligence checks – before they
apply for a Visa...’

I kid you not!

You couldn’t make this sort of crap up (that is of course
unless you were a civil servant in the Home Office). Only such a person, who
had had their brain surgically removed ad reinserted in their rectum could come
out with a quote like this! And the best bit is – they see no irony in the
statement!

So there you are. You want to come to the UK and you are
willing to pay £2 million for the privilege. Now, on a balance of
probabilities, there is a high degree of likelihood that you may have other
funds secreted about your person, but before the UK Government will let you in,
you have to have a bank account already set up, so that when you arrive, hey
presto, you are already equipped to give the money to George’s friends in the City.

This really is the most insouciant rubbish, but if you
see no evil, then you will hear no evil, and that is where George re-enters the
tale.

Back
in 2013, the Parliamentary Commission on Banking Standards said that the old regulatory
regime had failed to provide a system that could hold senior managers of
financial institutions to account for banking failures, including those that
were brought to light in the financial crisis.

As a
means of deflecting attention from what had become a very serious target for
public anger, the Government proposed a new approach, which would hold senior
officials of banks responsible for banking failures unless they could
demonstrate that they were unaware of any wrongdoing while they were in charge.

This
would have been an excellent step towards requiring bankers to demonstrate that
for once, they were taking proper steps to ensure public accountability and
that they were now accepting their responsibilities, and not just trousering
vast sums of cash.

Well, you can imagine the angst this provision caused
among the suits in the suites, and they immediately instructed their lobbying
agencies, their PR teams, and their learned friends to find ways of getting
this, otherwise reasonable requirement, changed.

Well, bless him, George has now bowed to their demands.
No doubt he reckons that enough water has flown under the bridge since the
Banking Commission’s deliberations, and that most people will have forgotten
the awful stories and tales of incompetence, crime, negligence, recklessness
and downright stupidity that daily flowed from the Committee room.

But these applied only to bankers, you know, the nice
chaps in the suits, many of whom went to the right schools and universities,
indeed, some of them may have even been contemporaries of George at Oxford, and
like I said earlier, when it comes to dealing with members of that class,
George hears and sees no evil.

So now,
George has scrapped the controversial plans to make senior executives in the
financial services industry prove they were unaware of any wrongdoing on their
watch.

The
about-turn, which was unveiled by the Treasury on Monday night, forms part of
the Government's Senior Managers and Certification regime, where top managers
across the financial services industry will be held accountable for regulatory
failures under new rules designed to stamp-out wrongdoing and recklessness.

The
initial proposals imposed a requirement that senior staff should demonstrate
that they had not known that wrong-doing was being carried on..

However,
following pressure from the industry and warnings that the rules would deter
top talent from coming to the City, it will now be up to regulators to prove
that steps to prevent regulatory breaches were not followed.

Yet
again, the usual bromide about top talent being deterred from a following a
City career was trotted out, and yet again, George swallowed it.

Regulators
will now have to prove wrongdoing as Treasury extends plans to make top
executives accountable for failures on their watch across the financial
services industry

Executives
will now have a statutory "duty of responsibility" that will require
them to take steps to prevent regulatory breaches.

Andrew
Bailey, the Bank of England's governor for prudential regulation, said he
"strongly support[ed]" the Treasury's announcement, and denied that
it represented a watering-down of the initial proposals.

Well
no, that’s just not true!

You
see now, any banker who might be unfortunate enough to have to be investigated
for any breach will simply be told by his lawyers to maintain his right to
silence and to refuse to answer any questions that might tend to incriminate
him.

Bailey
says; "The introduction of the ‘duty of responsibility’ in place of the
'presumption' makes little difference to the substance of the new regime. Once
introduced, it will be for the regulators (rather than the senior manager) to
prove that reasonable steps to prevent regulatory breaches were not taken. This
change is one of process, not substance. The focus for firms and individuals
should be on complying with both the letter and the spirit of the rules rather
than considering ways to circumvent them.”

Andrew
Bailey can call it what he likes, but it merely goes to prove what I have said
ever since this provision was first introduced, which is that it will never,
ever be applied. Regular readers of this blog will recall I have made that
point for months and now George, with this small amendment has confirmed my
argument, by giving the bankers a ‘Get out of Jail Free’ card!

In order
for a banker to be held liable under the new ‘negligence’ provisions, that case
had to demonstrate that the banker knew that what was happening to his bank was
likely to cause it to collapse, and that he did nothing relevant to prevent it.

It
would have been up to the banker to prove that he did not know the relevant circumstances,
but now he doesn’t have to, and of course will simply say nothing. So the
entire provision, over which there was so much soul-searching and whingeing,
has now been repealed, and the bankers are off the hook once again.

The
move was welcomed by the industry. Oliver Parry, senior corporate governance
adviser at the Institute of Directors, who maintained;

“The
FCA is right to drop the ridiculous ‘reverse burden of proof’ requirements from
the Senior Managers Regime. Scandals across the banking industry such as Libor,
foreign exchange rate-rigging and PPI misselling have given bankers a toxic
name and we support the regulators as they seek to address what went wrong
before, during and after the financial crash.

"This
rule, however, which was both unworkable and excessive, was a step too far. It is
encouraging to see policymakers heed the advice of the IoD, and others, who
raised concerns when the rules were first proposed."

A
spokesman for the Treasury said the move would help to “restore trust in
Britain’s financial services sector and would ensure that “tough standards of
personal responsibility and accountability apply beyond banking and across the
entire financial services industry”.

Yes,
well only a Treasury burble-speak policy wonk could come out with a piece of
gloop like that!

What
George has done is to water down yet again the regulatory provisions which were
intended to bring a real sense of purpose to the regime of banking supervision.
The real problem is that anyone with half an ounce of common sense could see
that the proposed provisions put the spotlight of responsibility firmly on the
men in the suits, and for the first time, gave prosecutors a chance of bringing
these men to justice.

Well,
we can’t have that can we? I mean, how could the protected species go about
their daily gilded existence, all the time wondering if they were going to be
given their just deserts for a change?

No,
time to go and have a chat to George, who had already agreed to other changes
designed to water down the regulatory process in the name of releasing ‘red
tape’!

That
is what I mean when I say that George is unwittingly helping members of his
class and milieu to facilitate financial crme. George likes bankers because
they are nice chaps, and he wants them to help grow the economy. If that means
bringing in a lot of dirty money, well as long as no-one rubs his nose in it, George will more than likely be prepared
to turn a blind eye.

All
the time his Treasury officials are telling him that they are working to help
to “restore trust in Britain’s financial services sector and ensuring that
“tough standards of personal responsibility and accountability apply beyond
banking and across the entire financial services industry, well then, no doubt
George will believe them!

Monday, October 19, 2015

Criminal conduct at Britain’s
banks is “a threat to national security” because of the huge damage it will
cause to the economy, the head of the country’s top crime-fighting body has warned.

Keith Bristow, director
general of the National Crime Agency, said money laundering by banks and their
other well-documented criminal activities risked undermining the “reputation of
the UK” and could trigger a sharp fall in the tax revenues generated by the
City.

Regular readers of my blogs
will know that I have been making these serious allegations for a long time
now. I have said repeatedly that the banks and their learned friends in the
(il)legal profession, represent a major threat to the well-being of the common
weal. I have repeatedly identified organised criminal behaviour as representing
a leitmotif for major banks, and they are helped and supported in their
dishonest conduct and their criminal actions by their legal advisers. Well, now
the Director of the National Crime Agency agrees with me, so all those bent
bankers and crooked lawyers who take such delight in criticising my articles
and choice of commentaries, can eat their own words.

The NCA assesses that many hundreds
of billions of pounds of international criminal money is being actively laundered
through UK banks, and their subsidiaries, each year.

The scale of the laundering
of these criminal proceeds is now so huge that it is therefore a strategic
threat to the UK’s economy and reputation. The proceeds of virtually all
serious and organised crime in the UK as well as the proceeds of a significant
amount of international serious and organised crime (including corrupt
Politically Exposed Persons seeking to launder the proceeds of their corruption
and hide stolen assets in the UK) is being laundered into and through the UK,
and these figures give the lie to the protestations of the banks that they are
doing everything possible to put their discredited houses in order.

Yes, they are spending a vast
amount of money hiring staff to work in anti-money laundering and financial
crime interdiction roles, but a significant number of these new hires are
first-timers who have little or no real experience of dealing with international
criminals. And all the time, the dirty money is flooding into these banks, with
the open connivance of the lawyers who are willing to provide a wide range of
dishonest services for international clients who are willing to pay high fee
levels, as long as no awkward questions are asked.

This state of affairs carries
a very high level of risk, but sadly, it has needed a very senior police
officer to point out that the criminal conduct of the banks poses a strategic
threat to the financial interests of this country. There will be many sleek, shiny-faced
suits in any number of plush offices who will tut-tut at the temerity of a mere
policemen making a public statement of such a nature.

One group of policy-makers
who will deeply resent the words of the Director of the NCA will be George
Osborne’s advisers in H.M.Treasury. They work for a politician who is only too
happy to see vast sums of foreign money coming into London, but like all
politicians, George doesn’t want bad news or inconvenient challenges (such as
“...is this the kind of money we should be accepting...”) attaching themselves
to his enjoyment of the cash flows!

Keith Bristow has warned that
“many hundreds of billions of pounds of criminal assets” are being laundered
through British financial institutions. ‘I believe the London property market
has been skewed by laundered money. Prices are being artificially driven up by
overseas criminals who want to sequester their assets here in the UK.’, These
statements have been made as part of an important announcement of details of a
landmark information-sharing agreement with banks to tackle illegal activity.

Now, this is going to be a
very interesting development in crime fighting, and I fear that it will be
doomed to failure in exactly the same way as the money laundering interdiction
regime has failed in the UK.

Why am I so cynical about
this?

Because it will depend on the
banks playing their part in full, and telling the truth when confronted by a
challenging application, and telling the truth isn’t exactly the strong suit
for these Mafiosi..

The proposed deal will see 10
of Britain’s biggest banks ‘voluntarily’ hand the NCA details of the accounts
and financial transactions of people suspected of money laundering and other
serious offences.

HSBC, at the centre of a
storm over tax avoidance by clients of a Swiss subsidiary, is understood
to be one of those participating. The deal will end decades of secretive
practices, during which banks have traditionally refused to hand over account
details without a court order. Both the NCA and the banks expect to face
legal challenges as a result, from customers angry that details about their
financial dealings have been given to the authorities.

Among other difficulties will
be what happens when the client accounts of a major law firm become the subject
of an application. Lawyers are among the biggest money laundering facilitators,
and they hold significant sums of money on behalf of clients. What is likely to
be the outcome when the NCA makes an official demand for the accounts of a
major client of one of the ‘magic circle’ law firms?

In my view, the amount of
legal argument and process which this scenario is likely to generate, will slow
down the investigative process immeasurably.Mr Bristow insisted, however,
that the agreement was justified because the scale of money laundering in the
City was so large that it posed a threat to the economy and national security.

During an interview he said:
“We need the evidence to investigate people and bring them to justice. We have
an interest as an agency in the reputation of the UK.

“It’s a national security
risk. Hundreds of billions of criminal assets are laundered through UK
financial institutions. Given how much our economy depends on financial
services in this country, we can ill afford the reputation of those
institutions to be damaged or for those institutions to lose their licences to
operate because of criminals exploiting their services.

“We rely on the financial
services and professional services sector for much of the wealth within our
economy, so that is a significant threat to our national security.”

He is too late! Such
sentiments might have been true 30 years ago, but frankly speaking, any private
investor who puts his trust in the UK financial sector to look after his best
interests is going to be royally screwed. You don’t believe me – just ask any
of the members of SME Alliance Ltd and learn from their horror stories of the
ways in which major UK banks saw them as sacrificial lambs, to be led to the
slaughter.

Mr Bristow, rather sweetly in
my view, said the banks would benefit from the detection of criminal activity
that would otherwise put their future in jeopardy, and insisted that only those
suspected of serious criminality would be targeted.

He added: “We are not
cheerleaders for the banks, but they deserve credit for taking some risk to
help us target these people. It’s a genuine change through an information-sharing
partnership that will give us opportunities that we would otherwise not have
had.”

Don’t be too ready to praise
these crooked institutions yet Keith, wait for a couple of years and see how
well the system is working! Suspend any cheerleading for British banks until
you see some genuine change in their criminal behaviour!

The information-sharing
agreement follows a meeting last year between Home Secretary Theresa May, the
British Bankers’ Association, the Financial Conduct Authority and the NCA.

It will operate as a pilot
scheme for a year, beginning this month, and will be expanded to include
further banks if successful.

Each participating
institution has agreed to pass on account information whenever the NCA signals
that it has received a “suspicious activity” report from another institution
about a customer’s financial dealings. The aim is to ensure that a person
suspected of money laundering at one bank is not able to carry out similar
activity elsewhere undetected.

The legal powers governing
the new system are contained in section 7 of the 2013 Crime and Courts Act. It
gives the banks and other organisations the legal right to disclose otherwise
confidential information to the NCA to help it carry out its tasks. These
include fighting economic and cyber crime, trafficking of people and drugs, and
other forms of organised crime.

The NCA said it was necessary
to focus on tackling criminal activity carried out through banks because the
British banking sector was responsible for generating eight per cent of the
country’s GDP, and 12 per cent of tax receipts.

The 10 institutions taking
part include high street retail and investment banks. Their names are not being
disclosed by the NCA because of concern that their cooperation with law
enforcers could put them at a commercial disadvantage.

We are not told what will be
the outcome when a bank hands over information requested by NCA, and where the
information, upon investigation, proves that the bank concerned has been
routinely ignoring suspicious transaction activity for a long time, thus
effectively laundering the proceeds. Will this knowledge in turn trigger the
kind of investigation and prosecution it properly should?

This is another reason why I
say the banks concerned will have to be trusted to tell the truth about the
transactions being requested, and I, for one, do not trust these specific
banking institutions any further than I could spit them!

I am very grateful to Keith
Bristow for making these observations and pointing out that the volume of
criminal money passing through the banking institutions represents a major
threat to the UK economy.

His intervention means that
the politicians and the civil servants have now got to start taking the issue
seriously, and realising that the issue of the criminal handling of all this
criminal money, as well as the dishonesty of the banking institutions, has now
become an important electoral issue.

The Tory government is
deliberately and cynically dismantling a whole raft of financial regulations
demanded by their banking friends in the City. They are using the excuse that
they merely are removing red tape restrictions which they say are holding back
British business, but in reality, this exercise in de-regulation is intended to
make it easier for their light-fingered friends in the financial sector to
accept more and more criminal money which is finding a temporary home in the
City of London.

How do I know this?

Well, the Sunday Times
reported on 18th October that that well-known laundering bank which
likes to say ‘Yes’ to foreign drug money, HSBC, has decided to stay in the UK
after all, instead of decamping to Hong Kong.

“...HSBC is leaning towards
remaining in Britain after a number of victories in its battle to water down
regulatory curbs on the banking industry.

A series of recent government
U-turns, including changes to the bank levy, mean it is more likely to keep its
headquarters in London at the end of the year, according to shareholders and
senior insiders.

Chief executive Stuart
Gulliver has secured “pretty much everything he wanted out of the government”,
a high-level source said. And a top 10 shareholder said it was “more than
likely that the bank will remain in the UK when the domicile review is
completed”.

That would mark a substantial
victory for George Osborne. The chancellor has been scrambling to convince HSBC
and fellow FTSE 100 emerging markets lender Standard Chartered to retain their
headquarters in London...”

Well I don’t know much about
a victory for George Osborne, it seems to me that he has bowed down completely
and abjectly to the pathetic empty threats of Stuart Gulliver and his Ton-Ton
Macoute bully-boys!

Remember, this is the bank
which was held out to dry by the US authorities for its part in a massive
criminal money laundering case.

HSBC
Holdings Plc’s $1.9 billion agreement with the U.S. to resolve charges it
enabled Latin American drug cartels to launder billions of dollars was approved
by a federal judge.

“A pending criminal case is not window
dressing” the judge wrote, noting that the case was filed and would remain
pending for five years under the agreement. “By placing a criminal matter on
the docket of a federal court, the parties have subjected their DPA to the
legitimate exercise of the court’s authority.”

Lack of
proper controls allowed the Sinaloa drug cartel in Mexico and the Norte del
Valle cartel in Colombia to move more than $881 million through HSBC’s U.S.
unit from 2006 to 2010, the government alleged in the case. The bank also cut
resources for its anti-money-laundering programs to “cut costs and increase
profits,” the government said in court filings...”

This is the banking
institution that George Osborne wants to keep here in London, and for which he
is prepared to feather-bed the regulatory requirements. You must decide whether
this demonstrates George Osborne’s commitment to money laundering preventions!

HSBC threatened to move its
domicile out of the UK, because of the tough regulatory regime it was being
forced to operate within. As a result, Osborne has turned himself inside out to
slash the bank levy and watered down the ring-fence rules that demand that
banks segregate their retail arms from their investment side.

Now, you read it here in this
blog months ago my prediction that HSBC and its dodgy overpaid executives would
never leave the UK, because life was too easy for them here. And I was right,
and it just got easier!

As important is the fact that
the Bank of England has dropped a proposed rule to require executives at failed
banks to prove they did all they could to prevent a collapse.

In one move, they have
rendered the regime which would have helped to ensure the imprisonment of executives of failed banking
institutions, null and void. In future reckless bankers whose institutions
fail, like Fred the Shred at HSBC will no longer face the possibility of
imprisonment for their criminal recklessness. Once again, the protected species
are off the hook.

The Sunday Times reports that
the final decision is still awaited, and that Gulliver still hopes to squeeze
more concessions out of H.M.Treasury. Well, nothing would surprise me, so watch
this space.

Looks like the money
laundering possibilities just got better for British bankers. Dig in boys, fill
your boots, just remember to remit George his share, but remember, just because
it is paid through the tax-man, doesn’t make it any more legitimate. These
monies are still the proceeds of crime!

About Me

Having spent my career dealing with financial crime, both as a Met detective and as a legal consultant, I now spend my time working with financial institutions advising them on the best way to provide compliance with the plethora of conflicting regulations and laws designed to prevent and forestall money laundering - whatever that might be! This blog aims to provide a venue for discussion on these and aligned issues, because most of these subjects are so surrounded by disinformation and downright intellectual dishonesty, an alternative mouthpiece is predicated. Please share your views with what is published here from time to time!